Oriental Bank narrows Q1 loss at Rs 393 cr; bad loans rise

New Delhi: Public sector Oriental Bank of Commerce (OBC) has narrowed its net losses to Rs 393.21 crore in the first quarter ended June 30, even as bad loans increased.

The bank had reported a net loss of Rs 486.20 crore in the same period of the preceding fiscal 2017-18.

Total income of the bank also fell to Rs 4,729.58 crore in the first quarter of 2018-19 as against Rs 5,214.44 crore in the same period a year earlier, the bank said in a regulatory filing.

Interest income for the period also fell to Rs 4,269.24 crore from Rs 4,437.72 crore.

The asset quality of the bank worsened with gross non-performing assets (NPAs) hitting 17.89 per cent of the gross advances as on June 30, 2018, from 14.83 per cent as on June 30, 2017. In value terms, the gross bad loans were worth Rs 26,141.28 crore by end of the first quarter of this fiscal, as against Rs 24,409.49 crore by end of June 2017.

Net NPAs or bad loans too jumped to 10.63 per cent of the net advances (Rs 14,262.04 crore) from 9.56 per cent (Rs 14,808.92 crore) in the year-ago period. The return on assets (annualised) improved to (-)0.65 per cent as on June 30, 2018 from (-)0.77 per cent in the year-ago period.

The overall provisioning and contingencies for the June quarter were raised to Rs 1,539.46 crore from Rs 1,469.48 crore. However, provisioning for bad loans alone came down to Rs 1,222.51 crore as against Rs 1,591.48 crore parked aside in the year-ago period.

The bank said it was required to make additional provision in respect of select borrowal accounts covered under the provisioning of Insolvency and Bankruptcy Code (IBC).

"Accordingly, the additional provision made in respect of such borrowal accounts during the quarter ended June 30, 2018, is Rs 377.34 crore," it added. The provision coverage ratio of the bank as on June 30, 2018, is 64.59 per cent,